09:54     PCCW<00008> - Announcement (4)                                      

    Consideration Ratio is greater than 5% but less than 25%. A circular      
    to shareholders in relation to the arrangements summarised in this        
    announcement will be issued as soon as practicable.                       
                                                                              
                                   By the Order of the Board                  
                                   PCCW Limited Hubert Chak                   
                                   Company                                    
                                   Secretary                                  
                                                                              
                                                                              
                                                                              
    DEFINITIONS                                                               
    `Capacity Allocation           The Capacity Allocation                    
    Agreement'                     Agreement dated 16 April 2005              
                                   between the Company, PCCW                  
                                   Communications, Telstra and                
                                   RGNL pursuant to which the                 
                                   international undersea cable               
                                   capacity currently held by                 
                                   the Reach Group will be                    
                                   allocated to PCCW                          
                                   Communications and Telstra by              
                                   way of the grant of                        
                                   indefeasible rights to use                 
    `Capacity Prepayment           The Capacity Prepayment                    
    Agreement'                     Agreement dated 15 April 2003              
                                   entered between certain                    
                                   members of the PCCW Group,                 
                                   Telstra and Reach in relation              
                                   to the prepayment by each of               
                                   them to Reach of US$143                    
                                   million for the purchase of                
                                   international capacity                     
    `Company'                      PCCW Limited, a company                    
                                   incorporated in Hong Kong                  
                                   with limited liability and                 
                                   whose shares are listed on                 
                                   the Stock Exchange                         
    `Consideration Ratio'          has the meaning given to it                
                                   in Chapter 14 of the Listing               
                                   Rules                                      
    `Directors'                    the directors of the Company               
    `International Services        The Hong Kong International                
    Agreements'                    Services Agreement dated 13                
                                   October 2000 entered into                  
                                   between Reach and a member of              
                                   the PCCW Group, and the                    
                                   Australian International                   
                                   Services Agreement entered                 
                                   into between Reach and a                   
                                   member of the Telstra Group,               
                                   in relation to the provision               
                                   of international connectivity              
                                   services to the PCCW Group                 
                                   and the Telstra Group                      
                                   respectively                               
    `Listing Rules'                the Rules Governing the                    
                                   Listing of Securities on the               
                                   Stock Exchange                             
    `PCCHL'                        Pacific Century Cable                      
                                   Holdings Limited, a                        
                                   wholly-owned subsidiary of                 
                                   the Company and the holder of              
                                   the PCCW Group's 50% interest              
                                   in Reach                                   
    `PCCW Communications'          PCCW Communications                        
                                   (Singapore) Pte Ltd, an                    
                                   indirect wholly-owned                      
                                   subsidiary of the Company                  
    `PCCW Group'                   the Company and its                        
                                   subsidiaries                               
    `Reach'                        Reach Ltd., a company                      
                                   incorporated in Bermuda with               
                                   limited liability and a 50:50              
                                   joint venture between the                  
                                   Company and Telstra                        
    `Reach Debt and Asset          The Reach Debt and Asset                   
    Restructure                    Restructure Deed dated 16                  
    Deed'                          April 2005 between certain                 
                                   members of the PCCW Group,                 
                                   the Telstra Group and the                  
                                   Reach Group                                
    `Reach Group'                  Reach and its subsidiaries                 
    `Reach Network Services        The Reach Network Services                 
    Agreement'                     Agreement dated 16 April 2005              
                                   between certain members of                 
                                   the PCCW Group, the Telstra                
                                   Group and the Reach Group                  
    `RGNL'                         Reach Global Networks                      
                                   Limited, a wholly-owned                    
                                   subsidiary of Reach                        
    `Shareholder Loans'            the amounts owed by the Reach              
                                   Group to the PCCW Group and                
                                   to Telstra prior to the debt